A new class of tRNA modification reactions in E. coli, involving the formation of a modified base containing a methyl-ester, has been characterized. The tRNA methyltransferase catalyzing this methylation reaction has been purified and characterized from E. coli MRE 600. This enzyme methylates uridine-5-oxyacetic acid (V) forming uridine-5-oxyacetic acid methyl-ester (V-ME), using S-adenosyl-L-methionine (SAM) as a methyl donor. At least 8 E. coli tRNAs are substrates for this V-ME methyl-transferase. Four of these have been identified as E. coli tRNA1 a, tRNA1Ser, tRNAPro (major species) and tRNAPro (minor species). In addition E. coli tRNAVa1 is a poor substrate for this methylation reaction. Rapid isolation of E. coli tRNA at 4 degrees C shows that at least 70-90% of the tRNAs capable of being methyl-esterified in vitro already contain the methyl-ester in vivo. Using the usual tRNA isolation procedures extensive hydrolysis of these methyl-esters often occurs.